According to Moody's, relieving mortgage loan rules in the UK, which is very home -configured in debt, will boost the default risks and restrict regulatory authorities the following confusion:
In recent years, the UK has loosened mortgage loan rules, has been considering further measures, and has some debts in Europe that can lead to a significant increase in mortgage defaults. It is one of the European countries. 
“After 10 years, the regulatory authorities have loosened mortgage underwriting rules in six of the eight European countries, which have the highest family debt level.
“This looseness increases the long -term risk of mortgage securities, target bonds, banks, and other mortgages.”
Single -out countries are 120 % of the third quarter office for the third quarter of national statistical data in Norway, Switzerland, Luxembourg, Sweden Finland, and the UK.
Moody's is added as follows. “In these countries, borrower generally has a low ability to provide services to additional debt, and by relieving lending standards, you can restrict regulatory authorities that relieve conditions during future market stress.”
This memo is after Nikhil Rathi, the highest executive officer of the financial behavior station last week, calls the government to lay out the dominant mortgage defaults that can be accepted when lending rules are alleviated.
“Relaxed loans will lead to more defaults,” Rathi said to the Senate Financial Regulation Committee.
He added as follows: “I need to talk about the risk selection of Congress.”
A petition from the city's watchdog is Keal Prime Minister Starge Prime Minister Starge, calling for the British economy to relieve the deficit to escape sustained low growth after Prime Minister Rachel Reeves wrote to regulatory authorities in December. Ta.
The Monetary Policy Committee withdrew the affordable mortgage -affordable test in 2022, but the bank implemented an important guideline that the bank should not lend more than 15 % of the book, 4.5 times or more of the loan. I did. Both tests were introduced in 2014.
Many banks and brokers say that keeping this on a predetermined rule for more than 10 years prohibits borrowers who can afford to buy mortgages in the market.
Moody's memo states: “The restrictions on relaxed loans do not necessarily lead to an increase in the amount of mortgage loans because the underwriting standards are set according to their own risk choice and loan strategy.”
However, credit agencies have added that the characteristics of the national market may lead to intense lending conditions.
“In some countries, smaller lenders had to adapt to the main lenders trying to expand their lending base.
“For example, in the UK, Challenger Banks may target high -risk borrower when high -street Banks invades a typical customer base.
“The easing of underwriting criteria in the UK has not influenced the current level of delinquency, but may decrease in the long term.”
However, credit agencies argue that the powerful Labor Market in the UK and low unemployment will reduce the risk of recession.
“Bank's credit quality is more robust than today than before the 2008 financial crisis, and banks are equipped to absorb impacts such as reduced mortgage performance.
